MURDER, POLITICS, AND THE END OF THE JAZZ AGE
by Michael Wolraich
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No productivity boost = flat wages
By PeraclesPlease on Wed, 06/01/2016 - 6:27am |Hey, let's pass a law, quick!!!
URL:
http://www.vox.com/a/new-economy-future/technology-productivity
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Comments
Interesting article, thanks. Unfortunately, Klein makes the same mistake that Tyler Cowan made in The Great Stagnation, which he cited. Klein writes, "Why isn't all this technology improving the economy? Because it's not changing how we work."
That's nonsense. Klein keeps returning to examples like iPhones and Google Maps. Of course those technologies don't change how we work. They are consumer technologies. The television and the electric toothbrush didn't change how we work either.
But iPhones and Google Maps are the lip gloss of the information revolution. Go back forty years, before personal computers and internets, and you will find a workplace that is almost unrecognizable. No relational databases, no digital marketplaces, no data feeds, no spreadsheets, no accounting programs, no inventory software, no word processors. People were using typewriters and calculators for crying out loud.
How can you possibly write about information technology's effect on the workplace without so much as mentioning these technologies?
Granted, many of these innovations arrived in the late 20th century, but that is the period Klein is talking about. He dates the TFP flatline to 1973. Given that timeframe, his claim that information technology hasn't changed how we work is ludicrous.
by Michael Wolraich on Wed, 06/01/2016 - 11:13am
I haven't digested the article enough myself to say how much I agree - however, from my study of economic and social change in the late 1800's, I'm well certain that IT-based change isn't as unique and profound as many people assume it is compared to the advent of refrigeration, cars, electricity, vaccines, planes, etc.
If we average in the productivity changes on "how we work" for the last 30 years from 1986, roughly when PCs went mainstream, I'm not sure it scales so well year-over-year, vs. the spikes of moving from typewriter to PC word processing, introduction of spreadsheet, use of databases, adoption of email, and then communication advantages of mobile phones. I don't think MS Office use today is significantly evolved from WordPerfect and Lotus 1-2-3 thirty years ago. "You've Got Mail" from 20 years ago is now on mobile as of 10 years ago, but that affects many execs and sales staff, perhaps construction staff, but not necessarily a big boost to factory line workers, travel agents, Wendys counter workers, teachers, nurses, et al.
Probably it's important to differentiate between that which lets workers work better, and that which replaces workers as well. The latter certainly doesn't pad the worker's paycheck, and it's still a question of what improvements would increase the worker's margin, aside from a shortage/increased demand that these tech improvements make sure don't happen.
There's much more to contemplate even if not expressed well in this article - in terms of workforce, productivity, remuneration, job training, etc. A decade ago I was impressed with the changes that Project Management and Agile Development were bringing to workflow, creativity and ability to handle more and more work, though I think the changes have turned into certification and buzzwords as much as deep adoption of a new paradigm. That's what I fear most of it is. Realistically, with profound changes you should get 4 years of education in 3 years since the rise of IT, minimum. Is that really happening? I think the curriculum is largely the same - maybe some more simulation & other effective tools, but is there anything truly profound? And that's probably the most visible "workplace" we have, aside from drive-thrus and emergency rooms.
Oh yeah, our healthcare still sucks pretty badly, especially our ripoff senior home facilities. Productivity increase, or just better at automated stealing, whether from old people's health benefits or retirement funds or mortgages.... And then there's Uber, where more people work for less for someone else's profit. How will that get redistributed, if ever? Mobile apps that help make someone else rich, while drivers do roughly the same with less protection or insurance - but at least in that case, unlike retirement homes, the consumer benefits.
by PeraclesPlease on Wed, 06/01/2016 - 12:35pm
The impact of IT on the workplace has not been a steady acceleration. MS Word's improvement over Word Perfect is incremental, but Word Perfect's improvement over electrical typewriters is immense.
But regardless of the details, Klein's assertion that IT is "not changing how we work" is so absurd on its face that it makes it difficult for me to take the article seriously, though I find the topic very interesting.
by Michael Wolraich on Wed, 06/01/2016 - 1:10pm
Actually, it's crazy to me to claim that the iPhone doesn't change how people work. It definitely changes how I work. It is so much closer to having a full computer in my palm than Blackberry ever was that I can do things like comment here, from home, waiting for the rain to stop to see if I can bike to the office, because I can handle so many office tasks on my phone. I get this is not exactly a new story but it seems I can do more and more away from the office every few months. Yes, that also means I'm always on, but it also means I can run errands during the day and don't have to be in the office except to meet people in person.
As for productivity and wages -- I don't really buy it. I get that increasing productivity creates the possibility of wage increases, but it also creates the possibility of rising dividends and stock buybacks (which we have). You can add productivity all you want but if somebody is willing to do the work for less money, those productivity gains will not manifest in wages. You need a unique productivity that can't be duplicated by others who will undersell themselves. How many people can say that?
by Michael Maiello on Fri, 06/03/2016 - 8:39am
No one said the iPhone doesn't change how people work - the question is "what % productivity gain?" And remember, we're talking year-over-year gains. So if you got an iPhone last year, your productivity got a bump, but unless the apps next year are significantly better, you've flat-lined at a higher plateau as of 2015.
Now, who accretes the benefits of that productivity is another question. You being able to comment on dagblog certainly wouldn't benefit an employer, nor would biking vs. not biking to work, and there's a question how much people are multitasking and not focusing that actually detracts from work productivity, even if they're doing stuff they enjoy or important home tasks.
Arguably the "always on" means vacations don't even allow proper downtime, so people are slogging along exhausted (though it's easier to find restaurants, hotels/air bnb, destinations, tickets.... but again, that's largely unchanged the last 3 years). When my kids hang out on Facebook & Instagram past midnight, they're certainly not at their prime at school the next day, and the distraction throughout the day - weekday or weekend - is hard to assign to the plus column. Not sure whether it's much better for adults. In any case, true productivity gains as measured by a year's worth of output divided by costs & support systems is probably not as great as we imagine.
It's likely that as finance departments get more vulture-like with better analytics & access to industry info, that any productivity gains accrue to the owners/investors and not to employees, though it's still a question how much of whatever productivity (based on specific industry) is really attributable to the employee or employee-technology mix, and as the graphs in the article note, classically assigned productivity growth has been flat for some time. Much of Caterpillar's growth is based on automating tasks and doing much more with fewer employees. Theoretically there might be a wage boost for the workers who remain, but that probably disappeared in the recession as well.
The price of genetic sequencing has greatly decreased the last couple years, but that's more likely to increase total sector employment than wages unless demand butts up against limited supply - likely not, as much of this lab work is watching automated processes, so only limited skill needed.
There's the supply-and-demand equation, and with the Uber contingency jobs and sheer desperation in the marketplace, workers can't rely on a solid demand to boost their value and wages, so I'd agree that's largely outside this equation. Flat productivity is not the only issue affecting flat wages.
by PeraclesPlease on Fri, 06/03/2016 - 9:58am
If you're a liberal, low productivity is caused by those stingy companies who won't make capital improvements..
If you're a conservative, too much QE---debt's too damn cheap.
And some truth in both.
The root cause of low P imo is the lack of the vision thing. While many jobs have in fact been changed dramatically, still a great swath of workers in companies----retailers, airline workers, fast food, truckers, even medical staff are doing the same jobs---and it's difficult to make a positive case where it counts--that-those people are happier and able to save more and plan for a better future.
I think we have reached the point where pure technological advances, without the massive new infrastructure spending we need in the transportation, the electrical grid, more cheap and suitable housing land tracts, etc, will go begging.
New Party for 2020. The P is too-damn- low Party.
by Oxy Mora on Wed, 06/01/2016 - 12:40pm